As Nigeria lets naira float, Kenya Airways braces itself for forex losses

As Nigeria lets naira float, Kenya Airways braces itself for forex losses

Central Bank of Nigeria Governor Godwin Emefiele gives a press conference on the naira devaluation during a media briefing in Abuja on June 15, 2016. AFP PHOTO | PHILIP OJISUA Kenya Airways is facing more cash flow pressures from exchange losses expected from the effective devaluation of the Nigeria currency this week.

Nigeria is one of four countries from whom Kenya Airways has been unable to retrieve $25 million paid to its agents because of a foreign exchange crunch. The others are Angola, Mozambique and South Sudan, whose earnings from exports have been hit by low commodity prices, notably that of oil.

The devaluation of the Naira, going by the black market exchange rates, could see the remittances shed up to half of their value in dollar terms. There are also no guarantees that hard currency will be readily available to back future sales.

Nigeria is set to let the Naira float on Monday, a move expected to lead to a sharp devaluation given that the black market rate of 370 units to the dollar is barely half the official exchange rate of 197 Naira.

For Kenya Airways, which has its West African operations headquartered in the country, the expected inflationary pressure is […]

About Andrew Kwabena

The Editor of MoneyInAfrica

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